They offered to let Amazon and other retailers to sell ebooks at a discount for two years

An Apple ebook deal may be in the works after a long 10 months of investigation by the European Union (EU).

Apple and four major publishers that are being investigated have started offering antitrust concessions in an effort to ward off fines and further trouble. The four publishers are Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Hachette Livre (Lagardère Publishing France) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).

Penguin (Pearson Group, United Kingdom) is also being investigated, but did not submit a proposal.

One offer from Apple and the four publishers was to allow Amazon and other retailers to sell ebooks at a discount for two years. The Commission is now looking into whether these concessions are enough by taking opinions from the industry.

Last December, the European Commission opened a formal antitrust investigation into whether the five international e-book publishers had been practicing anti-competitive tactics with the help of Apple and its e-book store iBooks. More specifically, the Commission wanted a closer look at the agency pricing model that the publishers adopted with Apple, which allows publishers to set a price for their ebooks and Apple takes a 30 percent cut. However, the publishers can't sell those same books on other retail sites like Amazon for a lower price.

This was not only seen as anticompetitve by the European Commission, but also the U.S. Department of Justice (DOJ). DOJ sued Apple and the publishers in April 2012 over the agency pricing model.

Harper Collins, Simon & Schuster and Hachette Livre decided to settle the case with the U.S. DOJ. However, Apple, Penguin and Macmillan have decided to fight the antitrust case.

The U.S. bench trial in the Apple e-book case will start June 3, 2012.

Following the start of the ridiculous DOJ case in the US (which mirrors the eqaully silly EU one) ABA head Oren Teicher released a statement revealing that he led a contingent of ABA executives to Washington, D.C. to meet with DOJ officials “to convey just how important the agency model is for the health of the book industry and a truly competitive marketplace …”

Teicher’s statement is an eloquent one, and worth quoting at length:

quote: As we understand it, the investigation is not questioning the legality of the agency model, but, rather, whether it was arrived at in an illegal manner. The critical point we made to DOJ was that any attempts on the government’s part to remedy any alleged wrongdoing must not end the agency model, which has created a more competitive marketplace.

Since the introduction of the agency model, the market has become not less competitive, but, rather, far more competitive. There is much more competition in the retail sector, as Apple, Barnes & Noble, Google, Kobo, and indie booksellers have all entered the market, offering consumers many more choices. There is also far more competition among publishers, which are now regularly offering special promotional offers, with lower-priced titles. In our channel, we have seen that the average prices to booksellers and to consumers have dropped since the introduction of the agency model.

Before the introduction of the agency model, a single online retailer was selling e-books significantly below cost, dominating this nascent market, and rapidly growing readership in their proprietary format. It may be that their intent was to capture this market not only for book purchases, but, perhaps more importantly, to sell these consumers products from the full range of other online product offerings — everything from lawn furniture to flat-screen TVs. As many analysts have noted, the losses that online retailers have been willing to accept on book sales by selling below cost can be seen from another perspective as nothing more than shrewd ongoing customer acquisition costs.

In our meeting with DOJ, we argued strongly that if the agency model goes away, there is every reason to conclude that major online retailers will again use considerable resources to dominate — and ultimately monopolize — the market, and that, in a relatively short amount of time, consumers will have a radical reduction in choice when it comes to purchasing books in both digital and print formats. The market will be far less competitive on all levels, and this stark reality will adversely affect the health of the entire publishing ecosystem. In the end, we believe, it will mean a far less diverse range of titles being published and a much diminished range of publishers.

Just because you are not a fan of Apple does mean you have to swallow any old shite.

Okay: you're naive (or more likely just blindly on the side of Apple, given your posting habits).

This has nothing to do with "protecting" the customer. It has everything to do with publishers protecting their legacy business models and vehemently opposing anything that might cut into their profits. How has the customer benefited from the agency model (in addition to Apple's favoured nation clause)? Lots of choices of booksellers... who all charge the same (inflated) prices? Wow that's so awesome. How could I not want that?

Just think for a moment. Amazon eliminates the competition through selling e-books at cost or below costs, in order to secure a monopoly position by driving all other competitors out of business.

Nice cheap prices - great - what's not to like? What happens next?

Amazon achieves a total monopoly of e-books, they are almost there and without an alternative model could have it sewn up in a year or two. Their e-books are in a propriety format. What direction do you think prices will go then? Up or down? And once a monopoly is established it's very hard to break, even through state anti-trust intervention.

Blocking the Apple and publishers deal hands a monopoly to Amazon. I for one don't think that can turn out well in the long run and almost everybody in the book business, authors, publishers and booksellers, agrees.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA